Gates changes course on tanker bids

In a major boon to U.S. defense contractors, Defense Secretary Robert Gates said Wednesday that the Air Force will resume control over the competition to pick a new aerial refueling tanker, and he reversed course and threw his support behind the service’s effort to develop a new generation of bombers.

Both announcements, which were made during a speech to the Air Force Association, were welcome developments to the defense industry audience, which has seen many top programs cut, scaled back or delayed because of the economic crisis and slipping support for the wars in Iraq and Afghanistan. The audience was so miffed with Gates that few in the back sections clapped when he took the stage.

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The Air Force has been trying since the beginning of the decade to replace its fleet of KC-135 tankers, which date from the Eisenhower era. Two attempts to acquire new tanker aircraft were stalled — the first amid corporate high jinks, the second by corporate protest — leading Gates to assume oversight for the new plane.

Gates said he was returning control of the program to the Air Force. But while he expressed confidence in Air Force Secretary Michael Donley and Chief of Staff Norton Schwartz to execute the tanker program and bid process, Gates said his office would continue to maintain a “robust oversight role.” And he provided a few words of caution.

“I don’t need to belabor the importance of getting this done soon and getting this done right,” Gates said. “We cannot afford the kind of letdowns ... and corporate food fights that have bedeviled this source selection for years.”

The two teams competing for the next tanker contract, led by Boeing on one side and by Northrop Grumman and the European Aeronautic Defence and Space Co. on the other, are eagerly awaiting the release of new draft bid specifications.

Donley said the release of the request for proposals is “close” and will be circulated to the companies “with ample time for discussions.” He said the formal bid specifications will be released later this year, and a contract will be awarded in 2010.